As businesses across the country are getting ready to reopen, they worry about doing it. This according to a survey by Loan tree. Nearly half of small business owners (46%) fear they won’t be able to afford to resume normal activities after mandatory shutdowns to slow the spread of COVID-19.
According to them, a key challenge that could prevent them from opening is the lack of funding to maintain operations. Some 39% of small business owners say they are concerned that they are not generating enough sales to make the opening worthwhile.
LendingTree reopening small business survey
Their fears stem from compliance with safety instructions which would limit their capacity to 25% or 50%. This, they say, would affect their bottom line. Moreover, fears that their staff will return (5%) will also limit their ability to serve enough customers to make a decent profit. While a majority (52%) expect their entire workforce to return to open, nearly a quarter (23%) say they will do so with fewer staff working fewer people. hours.
Those who plan to get all engines running (54%) plan to notify customers of their reopening by email. To further encourage business, 43% plan to offer promotions or special sales. Another 31% plan to use paid social media ads to promote their business in the first month after reopening. 35% expect to profit from unpaid organic social media content. Less than 9% of businesses say they will withdraw from promoting their business after reopening.
Concerns about a second wave
Despite optimism about the reopening, there are fears of a second wave of infections. More than a quarter of those surveyed (30%) are nervous about having to shut down again if there is another spike in infections.
Despite this, nearly six in ten small businesses are expected to reopen as soon as they are licensed. With 15% saying they’re willing to wait and see before opening, while 26% aren’t sure they’ll ever open.
Only 17% of small businesses say they will get the same number of customers spending the same amount as before the coronavirus outbreak. Even more surprisingly, only 11% of those polled say they are not afraid of reopening.
The challenges of reopening for small business owners
As the outbreak unfolded, businesses were forced to shut down as global supply chains collapsed and closures were imposed. In an effort to help businesses withstand the impact of the covid19 pandemic, business support has come through the Small Business Administration’s Paycheck Protection Program (PPP) and the Federal unemployment pandemic program.
The nation has also seen its unemployment rate rise 14.7% in April. Some states are posting unprecedented unemployment records. Nevada had the highest unemployment rate of 28.2%, followed by Michigan, 22.7%, and Hawaii, 22.3%. Some are hoping that a quick reopening would help get people back to work, but will face the challenge of many businesses operating at partial capacity.
This has led about 63% of small businesses to apply for funding through the Paycheck Protection Program (P3). Of those surveyed, only 44% have received funding while 28% are still waiting to see if their application has been approved.
Even those who have received P3 funding say they still face challenges ahead of the reopening and would need additional cash infusions. In addition, fears remain as to their eligibility for the delivery of the PPP.
Concern over PPP forgiveness
According to the program, borrowers are required to spend at least 75% of the PPP loan funds on salary expenses and no more than 25% on mortgage interest, rent and utilities to qualify for a discount. The terms of remission are based on their ability to spend those funds within eight weeks of receiving their loan.
In addition, any reduction in employees during the eight week period; reduction in salary for any employee beyond 25% of the salary year; compensation exceeding $ 100,000 in wages for individual employees could also affect pardon.
Unless Congress passes a law that would extend that eight-week period, many fear it will not meet the requirement given the uncertain business environment.
Despite financial worries and the lifting of restrictions. Companies will always need to allay the concerns of customers and employees being inside their places of business.
More in: Statistics